Week 1

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  • Published : November 10, 2012
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Question 1| | 1 / 1 point|
To save for her newborn son's college education, Lea Wilson will invest $1,000 at the beginning of each year for the next 18 years. The interest rate is 12 percent. What is the future value? Question options:

| 1)|  $7,690|
| 2)|  $34,931|
| 3)|  $63,440|
| 4)|  $55,750|
Question 2| | 1 / 1 point|
Sharon Smith will receive $1 million in 50 years. The discount rate is 14%. As an alternative, she can receive $2,000 today. Which should she choose?  Question options:
| 1)|  the $1 million dollars in 50 years.|
| 2)|  $2,000 today|
| 3)|  she should be indifferent|
| 4)|  need more information|
Question 3| | 1 / 1 point|
Mike Carlson will receive $10,000 a year from the end of the third year to the end of the 12th year (10 payments). The discount rate is 10%. The present value today of this deferred annuity is:  Question options:

| 1)|  $61, 450|
| 2)|  $42,185|
| 3)|  $46,149|
| 4)|  $50,757|
Question 4| | 1 / 1 point|
If expected dividends grow at 8% and the appropriate discount rate is 12%, what is the value of a stock with an expected dividend of $2.33?  Question options:
| 1)|  $62.88|
| 2)|  $19.41|
| 3)|  $29.12|
| 4)|  $58.25|
Question 5| | 1 / 1 point|
A 10-year bond pays 8% on a face value of $1,000. If similar bonds are currently yielding 10%, what is the market value of the bond? Use annual analysis.  Question options:
| 1)|  Less than $900|
| 2)|  More than $900 and less than $1100|
| 3)|  More than $1100|
| 4)| Not enough information to tell|
Question 6| | 1 / 1 point|
A 20-year bond pays 12% on a face value of $1,000. If similar bonds are currently yielding 9%, What is the market value of the bond? Use annual analysis.  Question options:
| 1)|  over $1,000|
| 2)|  under $1,000|
| 3)|  over $1,200|
| 4)|  not enough information given to tell|
Question 7| | 1 / 1 point|
A...
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